India’s primary market was buzzing throughout 2021, with 65 companies raising Rs. 1,18,704 crores through Initial Public Offerings (IPOs). New-age technology companies did well in the stock market, with brands like Zomato, Paytm, Nykaa and PolicyBazaar, mopping a whopping Rs. 1.2 lakh crores.
The bullish trend of stock markets captured retail investors’ interest in the shares of these companies. While some of the bets delivered impressive results, others kept the momentum, but some failed to deliver satisfactory results.
Now let us look at the multibagger gainers of 2021.
How Did IPOs Perform So Well in 2021?
The money raised from the primary markets in 2021 was 62% more than that raised in the previous three years. At a record Rs. 1.2 lakh crores, money raised via IPOs in 2021 was around five times that of 2020, which stood at Rs. 26,613 crores. It is also almost double the previous best of Rs. 68,827 crores in 2017.
The IPO market shrugged off concerns about the second wave of Covid-19 pandemic during the first quarter of FY 2021-22. Though the secondary market has seen some correction due to concerns over the new Omicron variant, the market for IPOs remains mostly unaffected.
Due to various factors like higher liquidity, improved macro parameters and strong recovery, the benchmark indices crossed all-time highs throughout the year. Sensex crossed the 60,000 mark to 62,245.43 points, while Nifty 50 crossed the 18,000 mark to hit 18,604.45 points in October. This positive sentiment led to the majority of IPOs turning to multi-baggers.
Which Were the big IPOs in 2021?
IPOs from new-age technology companies led to public issues in 2021. These saw record fundraising, retail participation, and huge listing gains. Some of the big names in the IPO list of 2021 included:
Paytm: One of the known payment platforms in India opened the IPO raising a whopping Rs. 18,300 crores. The journey started from a disastrous 27% crash from its issue price on the first day but finally managed to get oversubscribed 1.89 times by the final day.
Zomato: The IPO was opened by the online food delivery platform Zomato, raising Rs. 9,375 crores. It met with stellar success getting oversubscribed 38.25 times and increasing 53% against its issue price on its opening day.
PB Fintech: The parent company of PolicyBazaar and Paisabazaar raised Rs. 5,710 crores via fresh issuance of Rs. 3,750 crores and OFS (offer for sale) of Rs. 1,960 crores. It met with a net positive response, being subscribed 16.59 times.
Nykaa: FSN E-Commerce Ventures, the parent company of the online beauty e-commerce platform, raised Rs. 5,352 crores from its IPO. It turned out to be a huge success, getting 81.78 times subscription and listing gains of 79%.
Other prominent IPOs included IRFC, RailTel, PowerGrid Infrastructure Investment Trust, Star Health and Allied Insurance Company, Indigo Paints, MedPlus Health Services, Home First Finance, Barbeque Nation, Kalyan Jewellers etc.
Top-Performing IPOs in 2021
Though one could say that 2021 delivered a mixed bag of returns, 41 out of 63 IPOs were recently trading well above their issue prices. While names like Zomato and Nykaa made the headlines, the following IPOs have doubled, tripled, or quadrupled investors’ money.
Paras Defence and Space Technologies: This IPO was one of the smaller-sized IPOs raising Rs. 171 crores from its public issue. The company is engaged in the development and manufacturing of defence and space-related engineering products.
MTAR Technologies: This IPO was from a Hyderabad-based precision engineering solutions company, manufacturing everything from nuclear reactors to aircraft engines and other critical components. The issue price was Rs. 575 apiece, and these were trading at Rs. 2,295.05 as of 12:56 PM 30 December 2021.
Nureca: The Nureca IPO opened in February at an issue price of Rs. 400. Since then, it has delivered over 247% returns, trading at Rs. 1,945 as of 12:57 PM 30 December 2021.
Laxmi Organic Industries: This IPO had an issue price of Rs. 130 per share in March 2021 on its launch. As of 12:57 PM 30 December 2021, it was trading at Rs. 434.20, delivering around 205% returns.
Other top gainers that have rallied significantly above issue price include:
- Easy Trip: 175%
- Clean Science: 167%
- MacroTech Developers: 153%
- Latent View Analytics: 151%
- Tatva Chintan: 131%
- Nazara Tech: 105%
The year 2021 saw a record-breaking bull run for IPOs, with more than five new issues opening every month. Many will expect the primary market to remain active and vibrant for a while.
Other new-age digital players like MobiKwik, Ola, BYJU’S, More Retail, etc., are some of the other companies whose IPOs are awaited. Together they are likely to raise up to Rs. 1.5 lakh crores. However, factors like rising inflation, the rise of a new COVID-19 variant and central banks raising interest rates may present challenges for their success.
Frequently Asked Questions
Which companies have filed DRHP for IPOs in 2022?
The following are some of the companies that have filed draft papers with SEBI for IPOs:
How many companies have already got approval for IPOs in 2022?
Around 35 companies have already got approval from the market regulator to open their IPOs in the next year. These will likely open in early 2022 and raise around Rs. 50,000 crores in total.
How did loss-making companies like Paytm and Zomato open IPOs this year?
Earlier regulations allowed only profit-making companies to be listed on stock exchanges. In 2021, SEBI simplified the rules allowing loss-making, new-age technology firms like Paytm and Zomato to open IPOs.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.